WASHINGTON, D.C. (NEXSTAR) — The House voted Thursday to provide relief to people living in states like New York and California where the cost of living and state taxes are high.
“We’ve had the ability to deduct state and local taxes for well over 100 years,” said Rep. Katie Porter (D-California.)
The vote Thursday would repeal what’s known as the SALT cap — A $10,000 limit on federal income tax deductions for state and local taxes.
Lawmakers like Porter believe the SALT cap was only written into the president’s 2017 tax bill to hurt blue states.
“President Trump talked about his interest in using the tax code to politically punish states that had not supported him,” Porter said.
“The top districts that are hurt by this, the top 40 are Democrats,” said Rep. Judy Chu (D-California).
Congresswoman Chu adds the SALT cap doesn’t just hurt millionaires.
Families in her district make on average $76,000.
“The average SALT deduction in my district is $21,000. Can you imagine, a cap of $10,000. They definitely were hurt by this,” she said.
But Republicans who oppose getting rid of the SALT cap say most of the benefits would go to the top 1 percent of earners.
“The underlying bill here is a plain giveaway to the rich,” said Rep. Tom Rice (R- South Carolina).
“These people would be subsidizing, with their federal income taxes, mansions in high income states,” he said.
Republican Doug Lamalfa says if homeowners in states like California pay too much — it’s up to those states, not Congress, to lower rates.
“All we’re going to do here is reward bad behavior in California and five or six other high tax states,” he said.
The SALT cap repeal now heads to the Senate.